All posts by thomas

OUI by Hélène Villeneuve, on Flickr.Once in a while somebody enters the independence debate to tell us it’s all futile because the Yes side can only win in a referendum if they were enjoying a huge lead in the opinion polls before the campaign started (the idea behind it is that in most referendums the No side gains ground during the campaign).

My standard reply to such people is that the Scottish independence referendum is quite a special case because it has been going on for two years. Normally referendums are discussed for a month or so, just like general elections, and it means there’s very little time to convince people and especially to refute scare stories (which are always inevitable because it’s an easy way to obtain a No vote).

When you’ve got two years and have managed to get the No side to release all their Project Fear stuff very early, you’ve had a chance to refute the stories, and the electorate has had a chance to realise the stories are just there to frighten them.

The latest person to say that Yes is doomed was Alan Renwick in The Telegraph yesterday. Interestingly, he added three more reasons why the Yes side might win in a referendum:

There are three basic reasons why support for reform may pick up steam. The first and most banal is that voters sometimes already know what they think well ahead of the vote. If opinion is already settled, scope for a drop in the Yes vote is limited. […] Things get more interesting with the second reason. This is what is called “reversion point reversal”. The “reversion point” of a referendum is the situation that ensues following a No vote. Generally, the reversion point is the status quo: if voters opt against change, then the pre-existing situation continues. But sometimes the pre‑existing situation can successfully be painted as unsustainable. […] The third and final mechanism is the anti-establishment bandwagon. If the establishment as a whole opposes reform and voters are in the mood to give it a kicking, a bandwagon for change can sometimes gather speed.

The first reason is not very relevant to us — it just explains why a No landslide victory is impossible. (The people who were already planning to vote Yes to independence two years ago were convinced then and thus very unlikely to be persuaded to vote No.)

The second reason is much more relevant. More and more voters are discovering that we can only protect important parts of the status quo by voting Yes (such as the NHS, free university tuition and a decent welfare state), and this is having a marked effect.

The third reason should also help Yes — the establishment is split in Scotland, but the entire Westminster establishment are united in their opposition to Scottish independence.

When all these factors are seen together, it becomes clear why Yes campaigners in general are so optimistic. This referendum is eminently winnable.

escher by matt smith, on Flickr.I’m confident the outcome of the referendum will be a clear Yes, but if it ends up a No, it clearly won’t be because Better Together won the argument.

If they win, it’ll be because many voters got trapped in the quagmire of worries and vague promises of the No campaign, e.g.: “I’m a bit worried about the plans for X after independence”, “I’m worried my job might be at risk if we vote Yes”, “Perhaps the English will get angry at us after a Yes vote” or “Those new powers the talked about sounded quite nice, let’s try them out first”. Very few people — and certainly no more than before the referendum campaign started — will feel that the UK is working well for Scotland.

This is why a No vote won’t be the end of the story. Of course the Yes side will respect the result — nobody would even dream of declaring independence after a No vote without holding a new referendum — but the Yes activists will still believe in independence. Nobody will have been convinced of the impossibility of independence like this: “I liked the idea of independence, but they clearly demonstrated that a country the size of Norway or Denmark isn’t viable”, “It’s a shame Scotland would get invaded by Russia as soon as we declared independence” or “I used to think Scotland could go it alone, but we’re clearly too wee, too poor and too stupid”.

The No side keeps talking about avoiding a ‘neverendum’, but the only way to achieve that is by winning the argument. So long as a large part of the population still believes that independence is best for Scotland, of course the issue won’t go away.

A Yes victory will be forever. Independent nations don’t ever want to give up on their independence again. (Independent countries that aren’t nations — such as East Germany — might, but that’s a completely different story.) Once you’re independent, you’ll get used to it, and you’ll never want to give it up again. Did the banking crash cause Ireland to beg for reunification with the UK? Or Iceland to ask Denmark to be readmitted into the Danish Realm? Of course not!

A Yes vote will bring an end to the current discussions about devolution and independence and make us focus on building the best Scotland possible. That in its own right is an important reason to vote Yes.

An explanation of why Plan B cannot be stated by @TheRealMcGowan.I had actually decided not to write anything about the currency Plan B because I’ve discussed this topic at length in various posts over the past two years, but it’s probably a good time to summarise them.

First of all, the reason why there’s no Plan B in the White Paper and why Alex Salmond didn’t want to reveal a Plan B in the TV debate is because the three principles of getting the best deal, providing maximum clarity and refusing pre-negotiation are in direct conflict:

If we want to get the best deal for Scotland and provide maximum clarity to the voters, we’ll have to pre-negotiate important questions such as which currency to use.

If we want to provide maximum clarity and accept the veto on pre-negotiations, we’ll have to give away out negotiation strategy and accept the risk that we might not get the best deal for Scotland.

If we want to get the best deal for Scotland and accept London’s veto on pre-negotiations, we have to be cagey about our negotiation strategy, thereby sacrificing a certain amount of clarity.

Given this trilemma, it’s understandable the Scottish Government has chosen the third option. They can’t force London to pre-negotiate anything, even if it would clearly be best for the voters, and of course they can’t accept not getting the best deal for Scotland.

Basically, Salmond should have told Darling the following: “Of course I have a Plan B in my drawer. And a Plan C. And a Plan D. I wouldn’t be doing my job if I didn’t. However, if I revealed my alternative plans, I would effectively reveal my negotiation strategy, and that would inevitably lead to a worse deal for Scotland. I want the best deal for Scotland, so I can’t do that. Do you not want Scotland to get the best possible deal, Alastair?”

On top of this, there are extremely good reasons for believing that Plan B will never be needed because Plan A (a formal currency union) is actually in Westminster’s own interest:

[The Westminster politicians are] shooting themselves in the foot if they [veto Plan A], because there’s good reason to believe that a formal currency union will benefit the rUK more than Scotland because it’s good for currencies to be anchored in natural resources (such as oil) and exports (such as whisky) rather than being dependent mainly on volatile financial services.

Westminster vetoed a currency union to achieve a No vote, not because it’s in the rUK’s political and economic interest (which it isn’t):

It seems George Osborne was thinking that if he ruled out a currency union, voters would naturally vote No to independence. I’m not sure it has occurred to him that we might vote Yes in spite of his speech (or even because of it). […] By ignoring [other] options and by failing to explain why rUK politicians would opt for a solution that might harm rUK businesses, he shows that his sole purpose is scaremongering. He didn’t make this speech to provide visibility for rUK businesses (which would have been prudent), but to bully Scottish voters into voting No.

Using the pound informally would be possible, but it’s an option that is normally used by rather small countries, and I can’t see it being a sensible long-term option for Scotland (although it might be a good idea for a transitional period) […]

[A] Scottish currency linked to the pound sterling isn’t scary at all. In fact, that’s exactly what’s already happening at the moment when the Bank of Scotland, the Royal Bank of Scotland and Clydesdale Bank issue their own banknotes. They basically have to store one pound from the Bank of England every time they issue one pound, and that’s exactly how a currency board (which is the technical name for a linked currency) would work.

To put it simply, the National Bank of Scotland will put one pound sterling into its vaults (or more likely, into an electronic account) for each Scottish pound it issues. In that way, a Scottish pound is exactly as safe as an rUK pound because the National Bank of Scotland has the means to replace the one with the other if needed.

Furthermore, if a currency union isn’t agreed on, Scotland will receive a lot of assets to implement one of the solutions above:

Let’s have a wee look at the BoE’s Annual Report from 2013. On page 99 it states that the total assets are worth £58,022m (58 billion pounds), and the bank has put exactly the same amount into circulation as banknotes. This means that Scotland’s 8.3% population share last year was worth £4816m. […]

The amounts mentioned above don’t include the UK’s currency reserves (PDF), which belong to the Treasury (although they’re administered by the BoE). In August 2013 the gross currency reserves (including gold and all that) were worth $103,418m, and the net reserves had a value of $44,862m. I’m not an economist, but I presume it’s the latter that are of interest to us here. Scotland would in other words be due currency reserves (including gold) worth $3724m (or roughly £2232m).

Of course, it would hardly be great news for the stability of the Pound Sterling to lose such a great parts of the assets underpinning it from one day to the next, which is why it’s very likely the rUK politicians will start begging Scotland to accept a formal currency union soon after a Yes vote.

[The] main issues are likely to be the national debt (unless the rUK decide to keep all of it in order to safeguard their permanent membership of the UN’s Security Council) and the need to have been a member of ERM-II for at least two years. It seems unlikely Scotland would be able to introduce the euro before 2023, even if it became a political priority.

Of course, if Scotland decides not to introduce the euro, staying out of ERM-II is all it takes. This is what Sweden and many of the newer EU members are doing at the moment.

It’s therefore understandable why Salmond didn’t want to talk about a plan B, and it’s also clear that an independent Scotland will be using the Pound for the foreseeable future.

Can we now talk about something which actually matters to most voters?

As a rule of thumb, I reckon you can get a rough idea of a country’s foreign policy priorities by drawing a circle around the capital, because this is where the parliamentarians, government ministers and the foreign office staff are based, so the capital is the centre of their universe.

On the following map, I’ve drawn a 500-mile radius around Edinburgh, London, Copenhagen and Berlin to illustrate this idea:

Copenhagen’s circle includes significant parts of Norway, Sweden, Finland, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Germany, Belgium and the Netherlands. This perhaps explains why Denmark fought so hard for the independence of the Baltic countries and for their eventual membership of the EU when most other EU countries didn’t think it was that important.

London’s circle takes in most of the British Isles (but not Orkney, Shetland and the Outer Hebrides), France, the Low Countries and Germany, and bits of Denmark and Switzerland, which is probably a reasonable guide to how London-based media view Europe.

Berlin’s circle takes in a lot on Central Europe, but the exact details need not concern us here.

Perhaps the most interesting thing to do is to look at the difference between Edinburgh and London. Compared to the UK capital, the circle of Scotland’s capital includes all of the Scottish islands, the Faeroes and significant parts of Norway, but excludes large parts of France and Germany. This means we can expect Scotland’s foreign policies to focus much more on Scandinavia and the North Atlantic.

When I posted the map above on Twitter, Statgeek posted a map showing a 200 mile radius for London and Edinburgh (reproduced on the right) as a reply, noting the connexion between this and the HS2 plans and lack of infrastructure in North, as well as the fact that Northern Ireland is included in the Edinburgh circle but not in the London one.

If my circle theory is right, we should not expect the rUK’s foreign policy priorities to be significantly different from the UK’s; on the other hand, Scotland’s are likely to revert to the situation before the Union was created.

Improved Economist front page by Thomas Widmann, on Flickr.In the most recent issue of The Economist, there are four articles about Scottish independence, as well as a photo of a glaikit-looking man with a bad Saltire facepaint and a Buchanan-tartan scarf (which isn’t a good way to win me over, given that I’ve married into the Buchanan clan).

There are lots of errors, omissions and tendentious vocabulary in all the articles, so a full fisk would be a massive undertaking. Instead, I’ve picked out a few bits and pieces below.

“Don’t leave us this way”

The leader sets the tone and places The Economist — yet again — firmly in the No camp.

Britain doesn’t feel like a nation on the verge of cracking up. Many have clutched patriotic flags and wept this summer — but most of them were fans of the English football team.

This might be how it felt in London, but obviously there weren’t many supporters of the English football team in Scotland, and the independence campaign is now starting to be very visible north of the border. The person who wrote this clearly hasn’t been to Scotland recently.

A democratic, peaceful, well-governed nation state is a blessing which should not be casually thrown away.

Is the UK democratic? The unelected House of Lords still plays a major role! Is the UK peaceful? There were riots in London not that long ago, and I doubt people in Iraq and Afghanistan would praise British peacefulness! Is the UK well-governed? There are new scandals all the time, showing us the level of nepotism and corruption that is commonplace in Westminster! Is the UK a nation state? Better Together campaigners keep telling us it’s a union of nations, and not a nation state at all!

Tellingly, most members of ethnic minorities describe themselves as British rather than English or Scottish.

While that’s true in England, it again shows they haven’t been to Scotland recently. Here ethnic minorities happily call themselves Italian Scots, Pakistani Scots, English Scots, and so on.

“How did it come to this”

This article is the best by far — probably because the author actually has been to Scotland. However, it’s by no means perfect:

The impression is of a party promising Scandinavian-style public services supported by taxation closer to American levels. That is fantasy, not socialism.

This is of course a complete misrepresentation of reality. Nobody has talked about American levels of taxation, but simply a slightly lower corporation tax than in the rUK in order to attract more businesses. And although Scandinavian-style public services would be great, that’s a long-term ambition. Here and now we’re talking about practical measures such as providing enough childcare to allow women to return to the labour market — something which will probably be self-financing.

“Dear Prime Minister and First Minister”

Although the idea behind this article (to discuss the independence negotiation options) is great, it’s unfortunately full of errors.

The timetable will be contentious, too. Mr Salmond claims that Scotland could become independent on March 23rd 2016 […]. That is fanciful. […] [S]uch breakneck negotiations will store up problems for the future. […] A deadline of 2018 would be more sensible.

[…]

Past break-ups suggest that even after independence day, fiddly negotiations will continue. The Czechs and Slovaks only reached agreement on Czechoslovakia’s gold reserves in 1999, seven years after they had opted to break up.

As I’ve discussed many times in the past, the UK will be almost ungovernable between a Yes vote and Scottish independence day because you cannot implement anything that the Scottish Government doesn’t agree with. This means that a year and a half is probably the maximum Westminster can put up with, so negotiating until 2018 is simply not going to happen.

It’s much more likely deals will quickly be made on the really important issues, followed by further negotiations after independence day, just like the Czechs and Slovaks did.

The second [principle] should be that movable assets (such as arms) be split proportionately and that immovable ones (such as public buildings) remains with the state they are in.

This might be a fine principle, but I guess it means that Scotland gets the nuclear weapons, which Westminster might not particularly like. Also, lots of shared institutions are placed in London, so giving them all to the rUK without any compensation might be unfair.

[Y]ou will need to strike a grand bargain on defence. This may involve the RUK supporting Scotland’s NATO application and helping it assemble viable armed forces, in return for a long-term deal to postpone Trident’s move (something akin to Britain’ 99-year lease of Hong Kong from China).

This is simply not going to happen. The SNP has been very explicit that they will not accept a long-term deal that keeps Trident in Scotland. Also, NATO isn’t that important to most Scots, so it’s not an efficient threat to make people accept Trident. NATO might also not want a huge hole in the middle of their territory, so I’d be surprised if they decided to be too bloody-minded about Trident.

It would make little sense to insist on splitting the BBC, which benefits from economies of scale and could adopt a federal structure fairly easily.

They want us to keep the Westminster Propaganda Corporation?!? This is simply not going to happen. We’re going to create our own public-service broadcaster, and we’ll agree a deal (like Ireland’s) that’ll allow us to watch the BBC, too.

[A]fter independence the RUK could well opt to import cheaper green electricity from continental Europe.

Would it really be cheaper? But even if that was the case, the cables aren’t there — the existing ones are already running at full capacity. So they couldn’t do this immediately.

[Scotland will need] a dialling code (+424 is the most likely choice) and an internet domain (though the Seychelles have nabbed .sc, and Sierra Leone has .sl).

It’s good to see that The Economist reads Arc of Prosperity (this and this). I just wish they would read the newer articles, too.

“A costly solitude”

This final article deals with the economic aspects, but unfortunately they’re being unnecessarily negative.

[O]ver the next 50 years, the Scottish workforce will actually shrink (the rest of Britain’s will grow). The number of pensioners will rise.

The forecast that these numbers stem from are showing what will happen if Scotland remains part of the UK. In other words, as a British region, Scotland will grow older and poorer. This needs to change, but that requires access to some policy levers that are only available to independent countries (such as immigration policies).

Excluding oil, Scotland ran a public-sector deficit of £14 billion in 2012-13. At 11% of GDP that is a bigger gap than in crisis-stricken Greece and Ireland.

Excluding oil is crazy, given it’s there at the moment. Also, once you subtract the costs of Trident, HS2 or many other of Westminster’s white elephants, the deficit shrinks to much more reasonable levels.

Scottish productivity is 11% lower than the rest of Britain’s; anaemic exporting, together with a shortage of innovative firms and low R&D investment, helps to explain this lag.

It’s true that Scotland has problems in these areas, but that’s because it’s been impossible to fix them while part of the UK. As an independent country we can do something about this — for instance by making it worthwhile for companies to invest more in R&D.

To sum up, The Economist managed to disappoint again — although this issue wasn’t nearly as abusive as their infamous Skintland front page.

I had hoped they would finally have sent some unbiased reporters to Scotland to find out exactly what is happening up here, but I guess they’re too much a part of the Westminster bubble.

They should heed the final words of their second article: “The polls suggest they will not [form a new country]. But that is not how it feels right now on the streets of Glasgow.”

David Cameron in Battle with Alex Salmond over Scottish Referendum by Surian Soosay, on Flickr.I think Alex Salmond does a very good job as First Minister, but I fully respect that he’s not everybody’s favourite politician. However, apparently this dislike is making many people vote No:

In the Survation poll of 1003 Scots, 36 per cent said the thought of Salmond running an independent Scotland is pushing them towards a No vote in September’s referendum.

[…]

Only 12 per cent of voters say Salmond has made them more likely to vote Yes, while 46 per cent say their view of him won’t change the way they vote and six per cent are unsure how it will impact on their decision.

This is barking mad! It would be like being against the Act of Union in 1707 solely because of a personal dislike of the Earl of Seafield (one of Scotland’s most prominent politicians at the time).

Also, Alex Salmond is 59 years old, so he’s unlikely to continue to dominate Scottish politics for many years. In twenty years’ time, when he’s been a pensioner for a good number of years, how will it feel to have voted note just because of a personal antipathy?

However, even if getting rid of Salmond seems like the most important goal in politics (which is absurd given the very real problems this country is facing), voting Yes is the best way to achieve this.

After a Yes vote, the Scottish political landscape will change dramatically, and one of the main victims of this process is likely to be the SNP.

The SNP is a very broad church, and the glue that holds the party together is the quest for independence. Once that has been achieved, it will need to redefine itself in different terms, for instance as Scotland’s Social-Democratic Party, and while that might keep a majority of the party’s current supporters happy, many activists and voters will be lost to other parties. Even if Salmond wanted to, it’s by no means obvious he’d survive this change as leader.

On the other hand, if it’s a No vote in September, I expect activists will flock to the SNP in even greater numbers. The two-year referendum campaign has convinced so many people that independence is the right way forward for Scotland, and a No vote will just be seen as a temporary hiccough (unless No wins by a landslide, and that’s clearly not going to happen). It might even force Salmond to remain as leader for longer than he had anticipated, because his experience will be invaluable in the struggle to prevent Westminster from running roughshod over Scotland in the aftermath of a No vote.

The conclusion is clear. If you hate Salmond and the SNP, and you just wish Scotland had a “normal” political landscape rather than one defined primarily by the independence question, you should vote Yes to independence.

Abandoned Fax Machine by Abhisek Sarda, on Flickr.There was a rather odd article by professor Vernon Bogdanor, David Cameron’s former politics tutor at Oxford University, in The Guardian recently.

In the first half, he seems to argue that Scotland will have a lot of influence — although he makes it sound like it would be a bad thing because we might not always want to copy Westminster:

[T]he EU, despite its rhetoric, has not succeeded in establishing a common foreign or security policy. Indeed, in most of the foreign policy crises of the last 25 years – the first Gulf war, Bosnia, Kosovo, the Iraq war – the EU has been divided.

An independent Scotland, therefore, could decide its own foreign and defence policy. The SNP proposes that Scotland should become a non-nuclear state. An independent Scotland could, if it so wished, leave Nato. And we only have to look across the Irish Sea to appreciate that Ireland has considerable scope for independent policies. Whereas in 1914 Ireland, as part of the UK, was a combatant in the first world war, an independent Ireland in 1939 chose neutrality in the second. It makes a great deal of difference, therefore, which country one belongs to.

However, he then seems to change his mind and starts arguing that Scotland will become a fax democracy in thrall to Westminster:

Scotland would no longer send MPs to Westminster. Scotland would be represented in London not by MPs and by a member of the cabinet, the Scotland secretary, but by a high commissioner. So Scotland would have no political leverage over decisions made at Westminster.

[…]

An independent Scotland would have no right to a shared currency or shared social union. Its only right would be to propose them. It would then be up to the rest of the UK, a country in which Scotland would no longer be represented and would have no electoral or political leverage, to decide. The terms of independence could not depend on Scotland alone.

A yes vote would be a vote to disclaim the union. It would not then be possible for Scotland unilaterally to choose which aspects of that union it was able to retain. The nation would have to negotiate for what it now enjoys as a right.

The position of an independent Scotland negotiating with the rest of the UK would resemble that of Norway negotiating with the rest of the EU. Norway is in the position of a lobbyist – sometimes called a “fax democracy”, because the proposals of the council of ministers are faxed to Norway for its comments. But whatever these comments are, it is rare for the council to alter its proposals.

An independent Scotland would be a mere lobbyist in Westminster – and would also be in danger of becoming a fax democracy.

This is really odd. Professor Bogdanor seems to confuse the independence negotiations with life as an independent country, and it’s strange how he can even begin to see Scotland’s relationship with the rUK as similar to Norway’s non-membership of the EU.

Of course the independence negotiations will be conducted between Scotland and the rUK, not between Scotland and the UK (in other words, Scotland wouldn’t be represented on both sides of the table). However, we’re talking about a negotiation here (“a discussion set up or intended to produce a settlement or agreement” according to the CED), so obviously it won’t be a case of the rUK deciding the terms and conditions for independence unilaterally after receiving a fax from Scotland.

Once Scotland has become an independent country, it’s true Scotland will be represented by a high commissioner in London (Commonwealth countries tend to call their emissaries high commissioners rather than ambassadors). However, Westminster laws won’t apply north of the border any more, so Scotland won’t have any reason to fax comments down to Westminster. Of course some laws will have implications for Scotland, but that won’t be unique to rUK laws — no country exists in complete isolation — some Norwegian or Irish laws will also be of interest to Holyrood. This is one of the reasons why countries have embassies abroad.

The reason Norway is occasionally called a fax democracy is because Norway is part of the EU’s Single Market, but without being part of the EU. This means that when the EU makes decisions in this area (through the normal EU institutions — the Commission, the Council and the Parliament), Norway is not represented at all. All Norway can do is to send a fax begging the EU to take its views into account, but if the EU ignores the requests, Norway will still have to implement the decision. This would be almost like withdrawing the Scottish MPs from Westminster while remaining part of the UK.

It seems to me that professor Bogdanor hasn’t really understood that Scotland will be a completely normal independent country after independence. We won’t depend on Westminster any more. There won’t be any need to send them any faxes.